January 29, 2026

USDCAD open: 1.3560, overnight range 1.3507-1.3572, close 1.3558

USDCAD is on the defensive as traders unwilling to believe US Treasury Secretary Scott Bessent’s claim that the “US always has a strong dollar policy.” The comment got a bit of traction yesterday, but that reaction was more likely just an excuse to book some profits. The US dollar index (DXY) popped to 96.79 from 96.16 yesterday then dropped to 96.02 overnight.

The Band of Canada left rates unchanged and said that “elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate .” USDCAD traders ignored the news.

USDCAD is also weighed down by soaring gold prices.  XAUUSD rose to 5595.44 from 5.417.32 due to increased fears that Trump will order an attack on Iran.  His poll numbers are tanking because of ICE and he is in dire need of an attraction.  Bombing Middle East countries is a tried-and-true tactic by American administrations to deflect attention from domestic issues.

WTI oil climbed from 63.29 to 65.08 on fears of a US attack on Iran which were reinforced on Wednesday when Trump warned “Time is running out.” However, some analysts believe the US would avoid disrupting Iran’s oil exports, partly because Trump wants to avoid higher oil prices at home.

Canada’s trade deficit widened to $2.2 billion from -0.5 b in October. The US trade deficit widened to $-56.8B from -29.2B data due to a 5.0% jump in exports while exports fell bu3.6%. is on tap as well as US weekly jobless claims were a non-event rising 4,000 more than expected to 209,000 but that was 1,000 lower than last weeks upward ly revised result

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish. The two-week old downtrend line is intact while prices are below 1.3650 and yesterday’s breach of 1.3550 has set the table for further losses to 1.3430, a level last seen in September 2024.

The medium-term technicals are bearish but the RSI is extremely oversold which acts as a drag on USDCAD losses and warns that a bounce to 1.3650 is a risk. USDCAD has major support in the 1.3440-50 zone while 1.3650 should limit gains.

For today, USDCAD support is at 1.3510 and 1.3490. Resistance is at 1.3570 and 1.3590

Today’s Range: 1.3490-1.3590

Greenback’s Reprieve is Short-Lived

The greenback attempted a rally yesterday after Treasury Secretary Scott Bessent claimed the Administration always has a strong dollar policy and then denied yen intervention. The rally was short as the US Administration has credibility issues.

Powell Ignores White House

The FOMC left its benchmark rate unchanged yesterday at 3.50% to 3.75% in a widely anticipated move. Powell said growth is solid, the labour market shows tentative stabilisation, and inflation remains somewhat elevated, with much of the overshoot tied to tariff-driven goods prices. Governors Miran and Waller voted for a 50 bp rate cut.

Taking Stock

Asian equity markets closed higher, led by the Hang Seng, which rose 0.51%, followed by Japan’s Topix at 0.29%, while Australia’s ASX 200 closed unchanged.

As of 5:30 am PT, the UK FTSE 100 has climbed by 0.90%, the French CAC-40 has gained 0.77%, while the German DAX is down 1.07% due to Deutsch Bank issues. S&P 500 futures have risen by 0.18%, the US Dollar Index is at 96.24, the 10-year Treasury yield is 4.248%, and gold (XAUUSD) is at 5526.29after reaching 5595.44 overnight.

EURUSD

EURUSD is consolidating its recent gains in a 1.1938–1.1997 range and has a bullish bias while prices remain above 1.1900. Broad US dollar weakness combined with higher-than-expected Eurozone business confidence (actual 99.4 vs 97.2 in December) is supporting prices. The single currency is also in demand because Trump has essentially alienated the entire world, and investors are seeking alternative markets to America.

GBPUSD

GBPUSD is underpinned and trading in a 1.3781–1.3848 range, boosted by widespread US dollar malaise and talk of a possible US government shutdown. In addition, prices are supported by hopes that UK Prime Minister Starmer succeeds in resetting the UK–China relationship. The intraday technicals are bullish while prices are above 1.3750.

USDJPY

USDJPY is trading at the top of its 152.78–153.64 range after the US Treasury Secretary denied that the US was intervening to boost the yen. The rally is tepid, reflecting trader skepticism about the comment’s credibility.

AUDUSD

AUDUSD rallied from 0.7021 to 0.7095 before easing to 0.7037 in NY. Increased odds for an RBA rate hike on Tuesday, higher commodity prices, particularly gold, and general US dollar weakness fuelled the gains.

USDMXN

USDMXN dropped to 17.1117 from 17.2107 overnight, then rallied to 17.1985 in early NY trading. Prices are torn between concerns around the upcoming USMCA trade talks and peso demand due to Mexico–US interest rate differentials.

China

PBoC Fix: 6.9771 vs exp. 6.9521 (Prev. 6.9755

Shanghai Shenzhen CSI 300 rose 0.76% to 4753.87

President Xi Jinping wants to open a new chapter in China/UK relations. He said “China is willing to work with Britain to uphold a broad historical perspective, transcend differences, respect each other … opening a new chapter in China-Britain relations and cooperation that benefits both peoples and the world

FX  open high low

FX Heat Map (6:00 am) -one week

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview